Did Live 8 Work? 10 Years On, The Debt Burden Returns

It was one of the biggest charity campaigns of the century. A series of benefit concerts - starring U2, Paul McCartney, Stevie Wonder and Madonna - aimed a simple message at world leaders: “Make Poverty History.”

The huge Live 8 shows held back in July 2005 were designed to pressure Tony Blair, George Bush and other G8 heads of state to find a new settlement for the poorest countries in the world, as they gathered at Gleneagles for their annual summit.

Did it work? Public interest, especially in the U.K., where the summit was held, was overwhelming. The celebrity-backed concerts sparked debate and discussion about debt, trade justice, Africa’s economic future and wealthy nations’ responsibility to the Global South. Regardless of differences of opinion, increased aid and debt relief was expected by almost everyone.

Bono and Paul McCartney at the Live 8 concert in London, 2005.

During 2005, an estimated eight million people wore a white band, the ubiquitous symbol of the Make Poverty History campaign. Live 8 organizer Bob Geldof said British Prime Minister Tony Blair, as the agenda-setting G8 host, had the “biggest democratic mandate in history” for a deal. Blair later said he felt compelled to push the other leaders “the whole way.”

In the end, the leaders promised to double levels of annual aid to the poorest nations from $25 billion to $50 billion by the year 2010. And more significantly, they also agreed with the IMF, World Bank and the African Development Bank to drop the debt owed by 18 of the most “heavily indebted poor countries,” with another 20 countries also eligible for debt relief.

Were promises fulfilled? Well, 36 countries have gone through the debt relief process over the past decade, costing creditors $116 billion (according to the IMF). On aid, the G8's collective $50 billion promise was missed by around $20 billion at the 2010 deadline, according to Oxfam. Yet the international NGO has had, on the whole, largely positive things to say about the impact the Gleneagles commitments.

The significant boost in aid and the debt relief deal freed-up significant resources for African governments to inject money into health, education, and other poverty-reducing programmes. In Sub-Saharan Africa, the proportion of people living on less than $1.25 a day fell from 56% to 48% between 1990 and 2010.

According to a 2013 Oxfam survey of African countries that had debts cancelled, there was an increase of 40% on education spending and 70% in healthcare spending. Indeed Oxfam felt comfortable stating “the promises made in Gleneagles have helped to transform millions of lives.”

Others remain skeptical about how much increased aid is truly responsible for economic growth and poverty reduction in Africa. Big changes in the past 10 years include increased investment and trade with Africa by China, the rapid rise in digital connectivity and, of course, the ingenuity and entrepreneurialism of Africans themselves.

If the argument was only about who should take most credit for success, it wouldn’t matter very much. Yet the arguments remain worth having, mainly because they will shape what kind of interventions happen next. Sadly, 10 years on, new analysis by the Jubilee Debt Campaign reveals 22 countries are still wrestling with major debt crises, and a further 71 nations are at risk of slipping into the same state.

Take Ghana, for instance. The country, which saw around 75% of its debts wiped, has enjoyed decent growth and made progress on poverty reduction since 2005. While official figures are not yet available, the Jubilee Debt Campaign thinks foreign debt payments in 2015 may have increased to a worryingly high level: 23% of government revenue.

Gambia is also spending 15% of government revenue on foreign debt payments, despite also qualifying for debt relief in the aftermath of Live 8 and the G8 summit. And the report describes debt in Sudan and Zimbabwe - countries currently in default - as “unpayable.”

The remedy? The Jubilee Debt Campaign recommends a fresh round of debt cancellation, a new international arbitration mechanism for government debt, and - most importantly perhaps - tax justice.

One reason governments in developing countries depend so heavily on foreign loans is because they lose large amounts of revenue through tax avoidance and evasion. If international tax rules were set by the UN rather than the OECD (a group of 34 rich nations), developing countries might be able to receive more money from multinationals.

Turmoil in Greece has brought arguments about debt forgiveness back into public consciousness. If global debt levels really are sowing the seeds for the next financial crisis, it may not be the last time Bono and Bob Geldof pick up the phone and start calling the big concert promoters.